By Aaron Miller-
Chief executive of HSBC, John Flint has spectacularly shown where his loyalties lies when it comes to commitments made. They lie where monetary profits are.
Flint had pledged a boycott against the Saudi Arabian government , following the murder of Jamal Khashoggi in 2018, but his stance radically changed at an investment conference on Wednesday. Investing gurus assembled in Saudi Arabia focused on striking lucrative deals in the the world’s top oil exporting kingdom as it opens up under a transformation drive led by Prince Mohammed.
“It’s a privilege to be back in Saudi Arabia,” said Mr Flint, one of several high-profile bankers who took to the stage with Saudi ministers at a Riyadh conference where the kingdom was showing off its financial pulling power. “We are committed, this is an economy we have a lot of confidence in.”
He was joined by BlackRock’s chief executive Larry Fink, who had also pulled out of October’s “Davos in the Desert” event. Mr Fink said the region was “not perfect”, but that changes in the kingdom over the past two years had been “pretty amazing” and offered “great opportunities”.
“The fact that there are issues in the press does not tell me I must run away from a place. In many cases it tells me I should run to [it] and invest because what we are most frightened of are things that we don’t talk about,” Mr Fink said, in apparent reference to the negative publicity Saudi Arabia has received since Khashoggi’s death.
His killing at the Saudi consulate in Istanbul triggered the kingdom’s biggest diplomatic crisis since the September 2001 attacks on the US. It also tarnished the image of Crown Prince Mohammed bin Salman, the country’s de facto leader, who is spearheading a grandiose “Vision 2030” reform plan to overhaul the oil-addicted economy.
Riyadh has held a rogue operation culpable for Khashoggi’s death, and have 11 people on trial over the case. The finding by the CIA that Prince Mohammed Bin was responsible for ordering the callous murder has no legal strength even if they are right. The absence of solid proof which Turkey claims to have on tape has so far pushed the Khashoggi fiasco in the shade as ambitious businessmen most concerned about riches for the living, not the controversies that surround the politics of the dead, were in their element talking mega business on platforms that matter most
SPEAKERS
The podium for those keen on lucrative deals was filled with eloquent speakers including Daniel Pinto, head of JPMorgan’s investment bank and deputy to Jamie Dimon; Frédéric Oudéa, chief executive of Société Générale; and David Schwimmer, chief executive of the London Stock Exchange Group.
Virgin Group last year suspended talks with the kingdom’s Public Investment Fund (PIF) over a planned $1 billion investment. The forum was pleasantly informed of astronomical economical and business ventures the kingdom is embarking on in its bid to maintain and elevate its grand levels of financial leverage. It is launching a 12.5 billion riyal($3.33 billion)initiative to support private sector growth in the kingdom. Factually, many of this big economic plays find Saudi Arabia’s geopolitical position and economic might too overwhelming to just shake off over the murder of a man they really did not know or care much about.
Issues about ethics and principles count for little more than superficial front in the world of mind boggling business leaders whose primary drive to build their empire is an overriding consideration .
Leading international banks, including Goldman Sachs, JPMorgan, Morgan Stanley, HSBC and Citi were involved in multi billion deals with the kingdom. Prince Mohammed Bin Salman defies the conventional wisdom that nobody is beyond the law as he executes his reign with an iron fist on the one hand an a broad smile on the other , which could be a problem if not reciprocated.
EXECUTIONS
Criticism from The EU on Wednesday about Riyadh’s execution of 37 people from the Shia Muslim minority on terrorism charges this week might as well fall on deaf ears when the price of an independent kingdom like Saudi is handing out judgement. Riyadh temporarily released three women who are among a group of female rights activists put on trial last month as a brief metaphoric apology to the EU, before another eight believed to be connected to the detainees were arrested shortly afterwards.
Prince Mohammed Bin Salman
Karen Young, a Gulf expert at the American Enterprise Institute, said the Saudi market was too important for industries such as oil and finance to ignore.
“Given the opportunities and fees from the bond issuances and loans, as a relationship manager you can’t leave that on the table,” she said. “It’s a simple understanding this is an important client and as long as these opportunities are forthcoming ‘we have to be there’.”
She cautioned, however, that Riyadh could still struggle to attract foreign investment in other sectors because of the risks of doing business in the kingdom and the sluggish pace of growth.
“There may be an improvement in foreign direct investment this year, but it’s going to be very sector specific, it’s going to be in petrochemicals and projects that have been in the works for some time,” Ms Young said. “It [Khashoggi’s killing] is not behind them. It’s still very politically charged, but from a business perspective it’s diminished.”